3.10 An acquiring firm, A, seeks to buy a target firm, T.

The acquiring firm has better managers. The value of the target firm, if acquired by A, is $100 million.

The value of the target firm under its current management is only $80 million. However, the managers of T can impose a poison pill that would reduce the value of firm T to the acquirer by amount P without providing any benefit to shareholders of T. What is the minimum value of P that would prevent A from acquiring T? What is the cost of this poison pill to shareholders of the two firms?